Gihan Aboueleish

 Add up all the numbers you circled.
 What was your grade? 10? 15? 30? 40?
 ……………………………………………..
 The lower the score, the more questionable
are your ethical principles regarding business
activities.
 10 is the lowest … 40 is the highest.
 Consider why you answered as you did.
Business Ethics - Gihan Aboueleish 2

1. Legality is only a first step
2. Questions to ask: When faced with a
potentially unethical action.
3. Management’s role
4. Compliance/Integrity based codes
5. Corporate social responsibility
 A definition and stakeholders
Business Ethics - Gihan Aboueleish 3

oMore Than Legality
oStandards are
Fundamental
oStem From Individual
Business Ethics - Gihan Aboueleish 4

Ethical Unethical
Illegal but And
Illegal Illegal
Legal Legal
And But
Legal
Ethical Unethical
Ethical Unethical
Business Ethics - Gihan Aboueleish 5

Business Ethics - Gihan Aboueleish 6

 Business Ethics:
◦ The principles and standards that define acceptable
conduct in business
 Social Responsibility:
◦ A business’s obligation to maximize its positive
impact and minimize its negative impact on society
Business Ethics - Gihan Aboueleish 7

 An ethical issue is an identifiable problem,
situation, or opportunity that requires a
person to choose from among several actions
that may be evaluated as right or wrong,
ethical or unethical.
Did You Know?
The most common types of observed
misconduct
are lying, withholding information, and
abusive/ behavior.
Business Ethics - Gihan Aboueleish 8

1. Didn’t believe corrective action would be
taken
2. Feared retribution or retaliation from
supervisor or management
3. Feared they wouldn’t remain anonymous
4. Thought someone else would report the
misconduct
5. Didn’t know who to contact
Business Ethics - Gihan Aboueleish 9

Business Ethics - Gihan Aboueleish 10

 Conflict of interest
 Fairness and honesty
 Communications
 Business relationships
Business Ethics - Gihan Aboueleish 11

 Occurswhen a person must
choose whether to advance their
own personal interest or those of
others
Business Ethics - Gihan Aboueleish 12

 The heart of
business ethics
◦ General values of
decision makers
Business Ethics - Gihan Aboueleish 13

 False and misleading
advertising and
deceptive personal-
selling tactics anger
customers and may
cause a business to fail.
Business Ethics - Gihan Aboueleish 14

 Business people must be ethical toward their
customers, suppliers, and others in their
workplace.
Business Ethics - Gihan Aboueleish 15

 Are there any potential legal restrictions
or violations that could result from the
action?
◦ Question: If I do this will it break any laws?
 Does your company have a specific code
of ethics or a policy on the action?
◦ Question: If I do this will I go against the
employee handbook?
Business Ethics - Gihan Aboueleish 16

 Is this activity customary in your industry?
 Are there any industry trade groups that
provide guidelines or codes of conduct that
address this issue?
◦ Question: If I do this will I violate any trade
practices?
Business Ethics - Gihan Aboueleish 17

 Would this activity be accepted by your
coworkers?
 Will your decision or action withstand open
discussion with coworkers and managers and
survive untarnished?
◦ Question: Will my action cause peer acceptance or
rejection, or any peer pressure?
Business Ethics - Gihan Aboueleish 18

 How does this activity fit with your own
beliefs and values?
◦ Question: Will my action violate any of my personal
ethics, religious beliefs, or social values?
Business Ethics - Gihan Aboueleish 19

Individual Managers’ Opportunity: Ethical/Unethical
Standards and Codes and Choices
and Coworkers’ Compliance in Business
Values Influence Requirements
Business Ethics - Gihan Aboueleish 20

 Formalized rules and standards that describe
what a company expects of its employees
Did You Know?
Written ethics standards are more often found
in larger companies than smaller ones.
Business Ethics - Gihan Aboueleish 21

 The act of an employee exposing the
employer’s wrongdoing to outsiders
◦ The media
◦ Government regulatory agencies
Business Ethics - Gihan Aboueleish 22

 Four Dimensions:
◦ Economic – earn profits
◦ Legal – comply with the law
◦ Ethical
 Not just ―for profit‖ only
◦ Voluntary & Charity
 Promote human welfare and goodwill
Business Ethics - Gihan Aboueleish 23

Voluntary
Responsibilities
being a
“good corporate citizen;”
contributing to the
community and quality of life
Ethical Responsibilities
being ethical; doing what is right, just,
and fair; avoiding harm
Legal Responsibilities
obeying the law (society’s codification
of right and wrong)
Economic Responsibilities
being profitable
Business Ethics - Gihan Aboueleish 24

1. Green Mountain Coffee 11. Intel
2. Hewlett-Packard 12. Johnson and Johnson
3. Advanced Micro Devices 13. NIKE
4. Motorola 14. General Mills
5. Agilent Technologies 15. Pitney Bowes
6. Timberland 16. Wells Fargo
7. Salesforce.com 17. Starbucks
8. Cisco Systems 18. Wainright Bank & Trust
9. Dell 19. St. Paul Travelers
10. Texas Instruments 20. Ecolab
Business Ethics - Gihan Aboueleish 25

1. Business helped to create many of the
social problems that exist today, so it
should play a significant role in solving
them
2. Businesses should be more responsible
because they have the financial and
technical resources to help solve social
problem
Business Ethics - Gihan Aboueleish 26

4. Social responsibility is necessary to ensure
economic survival
◦ Businesses must take steps to help solve the
social and environmental problems that exist
today
Business Ethics - Gihan Aboueleish 27

1. Participation in social programs gives
businesses greater power, perhaps at the
expense of particular segments of society.
2. Many people believe that social problems
are the responsibility of government
agencies and officials
Business Ethics - Gihan Aboueleish 28

 Organizational relationships with owners
and stockholders:
◦ Profit and ROI
 Employee relations:
◦ Providing a safe workplace, adequate pay,
information about the company, listening to
grievances, and treating employees fairly
 Consumer relations:
◦ Respecting the rights of customers and providing
them with safe and satisfying products
Business Ethics - Gihan Aboueleish 29

 Environmental issues:
◦ Animal rights
◦ Pollution
◦ Global warming
 Community relations:
◦ Responsibility to the general welfare of the
community
Did You Know?
In one year, Americans generated 230 million tons
of trash and recycled 23.5 percent of it.
Business Ethics - Gihan Aboueleish 30

 The right to safety
 The right to be informed
 The right to choose
 The right to be heard
Did You Know?
John F. Kennedy was the 35th President
of the United States.
Business Ethics - Gihan Aboueleish 31

 Provide advice about ethics to employees
and management
 Distribute the company’s code of ethics
 Take action on ethics violations
 Review and modify the code of ethics as
needed
Business Ethics - Gihan Aboueleish 32

1. What are the ethical issues involved in
giving a customer an award for
consumption behavior without notifying
him/her first?
2. Do you see this as a potential violation of
privacy? Explain.
Business Ethics - Gihan Aboueleish 33

 How do you explain the
emergence of career
opportunities in the field of
business ethics and social
responsibility?
2-
34

1. What makes ethical decisions so difficult?
2. Many organizations are primarily concerned with
earning a profit or a return on their investment.
◦ Does this concern for owners and investors present an
ethical dilemma for companies when weighing business
decisions that favor employees and/or the general
public?
3. The right to be heard is one of the four rights in
the consumer bill of rights.
◦ How are some corporations addressing this consumer
concern?
Business Ethics - Gihan Aboueleish 35

1. Which of the following has the greatest effect on
ethical behavior in organizations?
a. authority of an employee’s superiors
b. an employee’s perception of the ethics of coworkers
and managers
c. an employee’s personal beliefs about what is right or
wrong
d. investors perceptions of ethics
2. Copying someone else’s work and presenting it
as your own is:
a. ethics
b. bribe
c. plagiarism
d. greenmail
Business Ethics - Gihan Aboueleish 36

3. A code of ethics is:
a. a set of formalized rules and standards describing
what the company expects of its employees.
b. a government legislation enforced by government
agencies.
c. a set of principles that describe what a person
believes is the right way to behave.
d. the impact of a business’s activities on society.
4. Which one of the following is NOT one of the four
rights provided in John F. Kennedy’s consumer
bill of rights?
a. right to safety
b. right to be inform
c. right to sue
d. right to choose
Business Ethics - Gihan Aboueleish 37

Individual Organizational Environmental
oValues oTop Level Mgmt. oCompetition
oWork Philosophy
oEconomic
Background
oThe Firm’s Reward Conditions
oFamily Status System
oSocial/Cultural
oPersonality oJob Dimensions Institutions
Business Ethics - Gihan Aboueleish 38

Is It Legal?
Is It Balanced?
How Will It Make Me Feel About
Myself?
Business Ethics - Gihan Aboueleish 39

 Religious Teachings
 Individual Rights
 Legislation
 Court Decisions
Business Ethics - Gihan Aboueleish 40

 Compliance-Based
◦ Increasing control and
penalizing wrongdoers
 Integrity-Based
◦ Define guiding values
◦ Support ethical behaviour
◦ Shared accountability
Business Ethics - Gihan Aboueleish 41

1. Top management support
2. Expectations begin at the top
3. Ethics imbedded in training
4. Ethics office set up
5. External stakeholders informed
6. There must be enforcement
Business Ethics - Gihan Aboueleish 42

Three Levels of
Social Responsibility
Societal Responsibility
Stakeholder Responsibility
General Profit Responsibility Ecological
Customers Employees
Public Environment
Owners/Stockholders
Suppliers/Distributors
Public Interest Groups
Business Ethics - Gihan Aboueleish 43

 The triple bottom line (TBL)
focuses corporations not just
on the economic value they
add, but also on the
environmental and social value
they add – and destroy.
 Triple bottom line is used as a
framework for measuring and
reporting corporate
performance against economic,
social and environmental
parameters.
Business Ethics - Gihan Aboueleish 44

 At its broadest, the term is used to capture the
whole set of values, issues and processes that
companies must address in order to minimize
any harm resulting from their activities and to
create economic, social and environmental value.
This involves being clear about the company’s
purpose and taking into consideration the needs
of all the company’s stakeholders – shareholders,
customers, employees, business partners,
governments, local communities and the public.
Business Ethics - Gihan Aboueleish 45

 Vision: To be the first  Ray Anderson - believes
company that, by its deeds, that if Interface, a petro-
shows the entire industrial intensive company, can get
world what sustainability is it right, it will never have to
in all its dimensions: take another drop of oil
People, process, product, from the earth.
place and profits — by
2020 — and in doing so we
will become restorative
through the power of
influence.
Business Ethics - Gihan Aboueleish 46

 Pesticides
 Waste disposal
 Clear-cut logging
 Deforestation
 Auto exhaust
 Conservation
 Recycling
 Ozone depletion
 Extinction of species
 Populations explosion
 Nuclear proliferation and testing
Business Ethics - Gihan Aboueleish 47

 50% waste diversion & 100% of Nova Scotians have
curb-side recycling
 Almost 79% return rate on beverage containers
 Over 1.5 billion beverage containers recycled since
April 1, 1996 & 403,000 litres of paint recycled
since June 1, 2002
 Over 912,000 tires are reused or recycled annually
through the Used Tire Management Program. 5.5
million tires since the program began.
 Total waste diverted from landfills
annually: 350,000 tonnes & Composted more than
233,000 tonnes of organic material
Business Ethics - Gihan Aboueleish 48

 Corporate Social Responsibility -the concern
businesses have for the welfare of society.
 Corporate Charity – charitable donations.
 Corporate Responsibility – acting responsibly
within society.
 Corporate Policy –position on social and
political issues
Business Ethics - Gihan Aboueleish 49

 Japan has developed ―green technologies‖ and is
exporting this technology - using ―green‖ as a
competitive advantage
 Some Canadian companies are exporting
environmental technology
 We have established IISD - the International
Institute of Sustainable Development
 Business continues to worry about the cost to
institute ―green‖ operating procedures
Business Ethics - Gihan Aboueleish 50

 American author, Paul Hawken, says that
sustainable development is not enough
 His proposals would make ―green‖ products
cheaper
◦ Prices should reflect all costs including disposal and harm
to the environment
◦ redesign products to make them biodegradable
◦ taxes on pollution and depletion instead of taxes on payroll
◦ redesign products to make them recyclable
 Are we ready for these kinds of changes? Do we
have any choice?
Business Ethics - Gihan Aboueleish 51

 Many companies have undertaken a Social
Audit - a systematic evaluation of the
company’s position and progress on social
issues
 Shareholders and other stakeholders have
actively encouraged companies to become
proactive on social issues
Business Ethics - Gihan Aboueleish 52

Percent of Respondents
Civic Duty
Learn Issues/Problems
Be With People With Same Ideals
Be With People They Enjoy
Improve Community
Help People
0 20 40 60 80 100
Total is more than 100%- respondents could give more than one reason.
Business Ethics - Gihan Aboueleish 53

$9
$10 Individuals
$12
Foundations
Bequests
$120
Corporations
Business Ethics - Gihan Aboueleish 54

New Charity
Estimated Total
Donor Given (in Causes
Millions
$25.6 Health &
Bill Gates
Education
$6.6 Conservation &
Gordon Moore
Education
James Stowers $1.5 Biomedical Research
Eli Broad $1.045 Education & Arts
Walton Family $.75 Education
Business Ethics - Gihan Aboueleish 55

o Merck $221.0*
o Johnson & Johnson 176.2
o Pfizer 123.9
o Eli Lilly 121.4
o IBM 116.1
o Microsoft 104.7
o Intel 101.0
o Bank of America 91.5
* In Millions
Business Ethics - Gihan Aboueleish 56

Int'L Affairs $4.1
Environ./Animals $6.4
Umbrella Charities $11.8
In Billion $
Art/Culture $12.1
Health $18.4
Human Serv. $20.7
Education $31.8
Religious Charity $81.0
Source: BusinessWeek. Dec. 2, 2002
Business Ethics - Gihan Aboueleish 57

Ethics Not Unique To U.S.-
Leaders Accountable
Demand for Socially
Responsible Behavior
Inter-American Convention
Against Corruption
Business Ethics - Gihan Aboueleish 58

1) Nokia Finland
2) Toyota Motor Japan
3) Sony Japan
4) Nestle’ Switzerland
5) Honda Motor Japan
6) BP Britain
7) Singapore Airlines Singapore
8) L’Oreal France
9) Royal Dutch/Shell Britain &
Netherlands
10) Canon Japan
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